Complex and Dynamic Business World Essay

1121 Words Mar 12th, 2013 5 Pages
“The business world has become more complex and more dynamic. Planning tools are designed for stable environments. Therefore, planning should be abandoned. Please, comment on this statement.”

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I. Introduction In today’s increasingly dynamic and complex business world, it is important to decide whether to use and trust in planning tools or if one should abandon them because they are made for more stable environments. This essay will give an overview of the planning tools and techniques that exist for assessing the environment. It will discuss the use of planning tools in a complex and dynamic business world. The statement that planning should be abandoned in a complex and dynamic business world will be
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A second technique to evaluate the environment is forecasting. Forecasting is a prediction of outcomes, which will help to identify events that will happen in the future. The common consent about this method is that is effective and time efficient. The ultimate goal of forecasting is to facilitate decision making through gathering information. There are two different forecasting techniques. One is quantitative forecasting, which is preferred when sufficient and hard data is given. It is based on historical data and tries to predict outcomes. The other one is qualitative forecasting, which uses personal judgment and knowledge to predict outcomes. This technique is used when hard data is limited or hard to gather. “First, it’s important to understand that forecasting techniques are most accurate when the environment is not rapidly changing. The more dynamic the environment, the more likely managers are to forecast ineffectively.” (Robbins & Coulter, 2011, p. 279)

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However, forecasting lacks the ability to effectively predict events like recessions or the actions of competitors. That leads to the assumption that organizations shouldn’t rely on a single forecasting method, but should use several models to be on the safer side. But the challenge for managers is to interpret and then implement the information into the planning decisions. Finally organizations must remember that forecasting, as a marginal skill, can

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